Case of the Day: SerVaas Inc. v. Republic of Iraq
Posted on October 7, 2013
The case of the day is SerVaas Inc. v. Republic of Iraq (2d Cir. 2013) (mem.). We have considered the case twice before: first we looked at the District Court’s decision granting SerVaas’s motion for summary judgment; then we looked at some post-judgment discovery issues. Here were the facts:
Servaas had a contract with the Ministry of Industry of Iraq for supply of equipment and machinery for a copper scrap refinery plant in Anbar Province. The contract, which the parties made in 1989, had a total price of more than $40 million. In 1990, following Iraq’s invasion of Kuwait, the US government prohibited American citizens from performing any contracts relating to any industrial project in Kuwait. Servaas was therefore required to terminate the contract, even though it had already delivered all of the goods and carried out many of the services required under the contract. After termination, Servaas demanded payment for services rendered, and when Iraq failed to pay, it initiated an arbitration before the ICC, to which Iraq did not respond. The arbitral tribunal was not constituted, due to the failure of Iraq to nominate an arbitrator.
Servaas sued in the Commercial Court of Paris and served the writ of summons through diplomatic channels on the Iraqi embassy in Paris, which agreed to accept it. Iraq did not appear in the action. In 1991, the court awarded more than $14 million in damages.
The claim in the case was for recognition and enforcement of a French judgment that SerVaas had obtained against Iraq’s Ministry of Industry and against Iraq itself. Today’s case was Iraq’s appeal from the summary judgment. Iraq’s argument, which I covered in the prior post, was that it was error to recognize the judgment against Iraq itself. But the Second Circuit made short work of this argument. The French court had treated the Ministry and the Iraqi state as indistinguishable, and the US courts were bound to do likewise.